Published: Thursday, September 11, 2008
Boeing Machinists flex their muscle like steelworkers
SEATTLE -- On picket lines in Seattle and production lines in Pittsburgh, union workers are showing no fear in demanding a hefty chunk of the profits from the Boeing Co. and United States Steel Corp., whose businesses have soared above the more-widespread economic downdrafts in other sectors.
On Tuesday, the United Steelworkers union ratified a four-year contract their chief negotiator, Tom Conway, touted as the best in the nation's steel industry in 30 years. The deal provides a $6,000 cash payment, a $1 an hour pay increase retroactive to Sept. 1, and 4 percent wage increases in each of the next three years, among other things.
On Saturday, the Machinists union shut down Boeing's lucrative aircraft assembly plants after rejecting a three-year contract offer containing bonuses averaging $6,400, pay raises averaging 11 percent, pension increases and a 3 percent cost-of-living adjustment -- $34,000 in average pay and benefit gains, by company estimates.
Moreover, the strike vote was a whopping 87 percent, compared with a 78 percent strike vote that preceded a 69-day walkout at Boeing in 1995, when the Machinists represented even more workers at the company.
Financial analysts and some within labor's ranks question whether demands for more money across the board and stronger job security are reasonable or realistic, but Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, and chief negotiator Mark Blondin say Boeing can well afford it.
Boeing reported $4.1 billion in profit last year, an 84 percent increase over 2006, and has about a seven-year order backlog, helped by strong exports.
A good deal for the Machinists -- financially and in outsource-limiting provisions -- will promote a rising tide to float other labor boats, Blondin and Buffenbarger said.
"It raises the bar in the community," Blondin said. "It's going to help everybody in this community, if not the country."
He said he hears plenty from other labor leaders about the rich deal the Machinists already have at Boeing, making an average of $27 an hour before overtime and incentives, but added that in the strike "I've had nothing but encouragement from other unions."
Unlike the vast majority of U.S. unions, the Machinists hold a heavy hammer at Boeing. Because of the wide range of highly skilled and specialized positions they fill, the company cannot make airplanes without them or find enough available and qualified replacements -- especially in the Puget Sound area, where the assembly plants are concentrated.
Chicago-based Boeing also is an anomaly, one of two manufacturers of large commercial passenger and cargo jets in the world. Its European competitor, Airbus S.A.S., also has a long order backlog and powerful, bellicose unions.
"This is America's last successful major heavy industry," said Richard Aboulafia, vice president and analyst for the Teal Group in Fairfax, Va. "As a result, the workers have a lot more power ... and they're taking advantage of that power."
Still, last year, 12.1 percent of U.S. workers belonged to a union and 13.3 percent were covered by union contracts, according to the U.S. Bureau of Labor Statistics.
Peter Morici, an international business professor at the Robert H. Smith School of Business at the University of Maryland, said Boeing's outlook for now is strong but added that the Machinists can push their case only so far and for so long.
"This is a good example of why manufacturing is leaving the country," Morici said. "This is like the UAW (United Auto Workers) in the '50s."
Buffenbarger, speaking from the Machinists' convention in Orlando, Fla., said the prickliest issue in the Boeing strike is job security because -- unlike pensions or health care or wage scales or other equally critical issues -- it cuts across all age groups, pay grades, experience range and other groups within the work force.
On Tuesday, the United Steelworkers union ratified a four-year contract their chief negotiator, Tom Conway, touted as the best in the nation's steel industry in 30 years. The deal provides a $6,000 cash payment, a $1 an hour pay increase retroactive to Sept. 1, and 4 percent wage increases in each of the next three years, among other things.
On Saturday, the Machinists union shut down Boeing's lucrative aircraft assembly plants after rejecting a three-year contract offer containing bonuses averaging $6,400, pay raises averaging 11 percent, pension increases and a 3 percent cost-of-living adjustment -- $34,000 in average pay and benefit gains, by company estimates.
Moreover, the strike vote was a whopping 87 percent, compared with a 78 percent strike vote that preceded a 69-day walkout at Boeing in 1995, when the Machinists represented even more workers at the company.
Financial analysts and some within labor's ranks question whether demands for more money across the board and stronger job security are reasonable or realistic, but Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, and chief negotiator Mark Blondin say Boeing can well afford it.
Boeing reported $4.1 billion in profit last year, an 84 percent increase over 2006, and has about a seven-year order backlog, helped by strong exports.
A good deal for the Machinists -- financially and in outsource-limiting provisions -- will promote a rising tide to float other labor boats, Blondin and Buffenbarger said.
"It raises the bar in the community," Blondin said. "It's going to help everybody in this community, if not the country."
He said he hears plenty from other labor leaders about the rich deal the Machinists already have at Boeing, making an average of $27 an hour before overtime and incentives, but added that in the strike "I've had nothing but encouragement from other unions."
Unlike the vast majority of U.S. unions, the Machinists hold a heavy hammer at Boeing. Because of the wide range of highly skilled and specialized positions they fill, the company cannot make airplanes without them or find enough available and qualified replacements -- especially in the Puget Sound area, where the assembly plants are concentrated.
Chicago-based Boeing also is an anomaly, one of two manufacturers of large commercial passenger and cargo jets in the world. Its European competitor, Airbus S.A.S., also has a long order backlog and powerful, bellicose unions.
"This is America's last successful major heavy industry," said Richard Aboulafia, vice president and analyst for the Teal Group in Fairfax, Va. "As a result, the workers have a lot more power ... and they're taking advantage of that power."
Still, last year, 12.1 percent of U.S. workers belonged to a union and 13.3 percent were covered by union contracts, according to the U.S. Bureau of Labor Statistics.
Peter Morici, an international business professor at the Robert H. Smith School of Business at the University of Maryland, said Boeing's outlook for now is strong but added that the Machinists can push their case only so far and for so long.
"This is a good example of why manufacturing is leaving the country," Morici said. "This is like the UAW (United Auto Workers) in the '50s."
Buffenbarger, speaking from the Machinists' convention in Orlando, Fla., said the prickliest issue in the Boeing strike is job security because -- unlike pensions or health care or wage scales or other equally critical issues -- it cuts across all age groups, pay grades, experience range and other groups within the work force.
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